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The top stories in home equity, mortgages and real estate
This week in home news
The economy is taking center stage on the housing scene, as inflation decreases and recession fears deepen. Bankrate’s stories look at the latest Consumer Price Index data (focusing on homes) and offer a five-year forecast on the housing scene. We also give advice on paying off your mortgage now, qualifying for a home equity loan, and how to brace for a “student loan delinquency bomb.” Plus, our weekly interest rates roundup and a look at a compelling but complicated HELoan alternative.
Borrowing against home equity: Can you make the cut?
One good thing about higher home prices: They increase home values, which means homeowners are holding bigger equity stakes. But if you’re thinking about borrowing against that equity for cash, brace yourself: Getting approved for a home equity loan could be tougher than getting your primary mortgage. You’ll need a high credit score and a low mortgage balance — among other criteria.
Settle the mortgage before an economic slowdown?
The tariff wars, coupled with spending cuts, the stock market drop, federal worker layoffs and other worries are sparking concern the U.S. economy could be heading into a recession. While you may think an economic slowdown is a good reason to pay off your mortgage early, experts warn against it.
Inflation ticks lower, but housing is still high
The latest Consumer Price Index suggests that inflation decreased slightly in February. But shelter (which includes housing costs) accounted for nearly half of the monthly gains and, in fact, has remained a large contributor to inflation overall over the past year: “There’s no dismissing the fact that housing affordability continues to be a major pain point for Americans,” notes Mark Hamrick, Bankrate senior economic analyst. Is there any room for hope in residential real estate?
Could a ‘student loan delinquency bomb’ torpedo homebuyers?
The pandemic-induced pause on reporting late federal student loan payments has ended, and flags are appearing on credit reports again. Dr. Rikard Bandebo, chief economist at VantageScore, warns that a “student loan delinquency bomb” could be coming — and would-be homeowners will likely be some of the unfortunate victims. As their credit scores take a hit, they may have difficulty qualifying for mortgages or securing favorable rates, which could negatively impact the housing market.
Housing, five years into the future
Trying to buy a house has not been easy of late. Home prices and mortgage rates remain elevated, inventory is still on the low side – and don’t forget all the economic uncertainties on the horizon. So, what is the outlook for the housing market over the next five years? We ask experts for their insights about costs, market crashes and more.
Rates round-up
Home equity rates hit fresh lows …
Another week, another drop for HELOCs: The average rate on the $30,000 home equity line of credit fell to 8.04 percent, its lowest level in two years. The average home equity loan, meanwhile, is at 8.37 percent – a record low for 2025. Is it time for homeowners to tap?
…while mortgage rates creep higher
The 30-year fixed-rate mortgage rate rose from its 2025 low this week, though it’s still well below the 7 percent benchmark. 2024’s series of Fed rate cuts had little impact on rates last year, and experts say stubborn inflation and the uncertainty surrounding President Trump’s tariffs are likely to impact rates in 2025.
In case you missed it
Technically, this story is week-before-last’s-news, but it’s worth highlighting.
A good way to get cash out of your home?
A relatively new product, home equity investments offer homeowners the opportunity to access their equity without having to take out a loan — or make monthly payments or incur interest. That’s because they’re not borrowing, they’re selling a stake in their home to an investor, who recoups after a set period or the home is sold. But make no mistake: It’s an obligation, and you could end up paying back a lot more than you received.
Read the full article here
